NBP contracts out to next Summer are down by between a half a penny and a penny this morning

Gas Market

A downward revision to temperatures for the start of the new year boosted the prompt and near curve on Friday.  A cold front is now expected to move south over northern Europe bringing below freezing temperatures with it from the start of January. NBP futures continued to firm on the day as the expiry of the Russia Ukraine gas transit deal nears and at the close near months were over 5.00p per therm higher.  January settled at 119.75p, its highest settlement since 03-December and brings the gain over the last five trading sessions to 18.25p.  A short gas system added to the upside on the prompt on Friday as the Spot closed 4.63p up at 119.63p.  A compressor issue at the Kollsnes plant is now expected to curb around 6mcm of exports until 07-January according to the Norwegian Gas Operator, Gassco.    

Power Market

A revised outlook for wind generation for the week ahead pressured the baseload prompt on Friday as the Day ahead product shed £14.35/MWh. Wind generation is now forecast to rise above 15.0GW on Monday. Baseload futures took the lead from the NBP futures curve and near months settled an average of £2.50/MWh higher on the day.  January, the front month, settled at £103.30/MWh bringing the gains for the last five sessions to £15.55/MWh. There were sharp gains in the carbon markets on Friday with contracts for European allowances up by 3.25% or €2.33 per tonne on average.  The Spot for EUAs settled at €69.63 per tonne, up €2.18 on the day.  

Oil Market

A larger than expected draw on U.S. crude oil reserves was confirmed by the Energy Administration on Friday and crude oil prices settled higher.  In the latest weekly report from the EIA, crude oil reserves were 4.2m barrels lower for the last week. This came in 1m barrels more than the earlier estimate from the industry group, the American Petroleum Institute. Also adding some support was the World Bank increasing its forecast for economic growth for 2025 in China following the recent plans released by the government to stimulate the flagging economy.  Tensions in the Middle East have increased over the holiday period as Israel and Hamas continue the conflict in Gaza but if this war remains contained it is unlikely to impact crude oil prices.  

Markets this morning

The increased wind generation has seen GB gas demand for today fall below 220mcm and supplies look comfortable with a 10mcm surplus.  Prices for the Spot and Day ahead are likely to open lower due to the system’s surplus but are still lying dormant so far. Trading is well under way for futures and near months are showing minor losses with January, due to expire on ICE platform today, down 0.71p per therm to 119.04p.  Contracts out to next Summer are down by between a half a penny and a penny.  In the crude oil markets, Brent is flipping between positive and negative ground, and the last exchange was completed just below Friday’s close at $74.13 a barrel.